The newly developed immunomodulator tacrolimus (FK506) is the first of a new class of agents that have enormous potential to change the way that dermatoses are treated and managed. Tacrolimus has been found to be active in a topical formulation with the latter exerting its effects by acting on the signal transduction pathways inside T cells and inhibiting gene transcription. The result is decreased responsiveness of T cells to antigens. Percutaneous absorption of tacrolimus is higher in diseased skin as opposed to healthy skin and, therefore, the drug will be taken in at progressively lower quantities as lesions heal. There is limited systemic absorption of tacrolimus over the course of therapy. The most extensive experience with tacrolimus has been in treating atopic dermatitis. In numerous trials, tacrolimus ointment 0.03-0.3% has shown to be effective in reducing the symptoms and severity of atopic dermatitis in adults and the paediatric population. Furthermore, there have been no significant toxic effects associated with topical therapy with tacrolimus. The most common complaint is that of local irritation after applying the ointment. This is generally transient and the patient is able to continue with therapy. The other dermatoses where tacrolimus has been used include contact dermatitis, psoriasis and pyoderma gangrenosum.